Inflation likely to show downtend by Q3: CEA

Published: Thursday, June 19, 2008, 16:03 [IST]

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Mumbai, Jun 19 (UNI) Inflation is likely to soften by the third quarter of the current fiscal, though there will be lots of fluctuation, the Chief Economic Adviser of the Union Finance Ministry Arvind Virmani said.

Talking to the mediapersons on the sidelines of a conference here today, the Mr Virmani said, number of fiscal and monetary measures have been taken by the government and the Reserve Bank of India and if needed more measures will be taken.

''Further, inflation is likely to show a down trend in the later part of this year. However, rise in inflation expectations are based on speculations need to be controlled,'' Mr Virmani asserted.

He said the that there were signs of a downtrend in food prices, nevertheless, oil prices are at higher level since several months.

''The factor that are relevant for inflation like commodity prices have fluctuations, thus, it is hard to comment but I hope in a couple of months it would soften,'' Mr Virmani said.

When asked about the economic growth, he said the present turbulence should not have any long-term impact on growth, there could be a moderation but it will remain near the level of 8.5-9 per cent.

However, he said that some reforms are essential for sustaining the nine per cent growth for long term.